In another bullish announcement for Bitcoin this week, banking giant Morgan Stanley filed a document with the Securities and Exchange Commission (SEC) seeking exposure to BTC. According to the document, 12 of Morgan Stanley’s mutual funds will allocate capital in BTC financial products.
Morgan Stanley’s mutual funds eligible for indirect exposure to Bitcoin include the Counterpoint Global Portfolio, managed by Dennis Lynch, the Asia Opportunity Portfolio, the Growth Portfolio, the Inception Portfolio and the International Advantage Portfolio.
The funds may invest in bitcoin futures contracts which will be settled in cash or in Grayscale Bitcoin Trust (GBTC) shares of the Grayscale company. The investment in BTC does not need to be continued and is done through a subsidiary that operates as an exempt company under the laws of the Cayman Islands.
The document states that investment in Bitcoin futures may change if the regulations for the underlying asset change. In addition, Morgan Stanley states that these financial derivatives have relatively little trading in other futures and may be manipulated.
Because of its potential GBTC involvement, Morgan Stanley rates fluctuations in fund premium as one of its potential investment risks. It was “historically” traded at a premium or discount to the price of BTC. In fact, the GBTC premium turned negative throughout the month of March, reaching a low of around -10%, according to research firm Skew. The Morgan Stanley document claims:
To the extent that GBTC trades at a discount to Net Asset Value, the value of a Fund’s investment in GBTC would typically decrease even if the value of GBTC’s underlying holdings of Bitcoin did not decrease.
A few weeks ago, Morgan Staley announced that it would give its richest clients exposure to Bitcoin through three funds established in partnership with Galaxy Digital and FS Investments and NYDIG. The bank’s decision was made after receiving pressure from its customers.
Source: SkewInvestor migrates to Bitcoin
The string of announcements from giants like Goldman Sachs, Morgan Stanley, PayPal and BlackRock that are expanding their bet to Bitcoin or entering the crypto market seem to be based on the current macroeconomic conditions.
Rick Rieder, BlackRock’s CIO, recently said that investors have been forced to seek assets that offer yield and appreciation in an inflationary economic environment.
With this in mind, Mike McGlone, Senior Commodity Strategist at Bloomberg, stated that a “commodity supercycle” is taking place in Bitcoin. This is due to the trend towards digitization in the world, which was exacerbated by the Covid-19 pandemic.
McGlone stressed that as a store of value, BTC is a solution that, for the first time in history, allows people to easily store, trade, transport and transfer wealth all year round. The analyst believes the world has entered a “paradigm shift” and a “falling dominoes” situation. McGlone added:
Every investor on the planet who has 100 units of any asset now knows that unless they allocate at least 1 or 2 of those units to Bitcoin, they will have more of that digital global reserve asset and just continue doing what they did before war This is becoming the global benchmark for digital global reserves (and it is missing).
BTC is trading at $ 58,297 and is moving sideways on the 24-hour chart. The benchmark cryptocurrency shows gains of 11.4% on the weekly chart and 17.5% on the monthly chart.
BTC shows the sideways movement on the 24-hour chart. Source: BTCUSD Tradingview
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